In an attempt to avoid further foreclosures, Fannie Mae is now offering a Deed for Lease program. Through this program, if you are facing foreclosure, you may be able to have the option to continuing renting your home from Fannie Mae for up to a year.
With this new Deed for Lease program, a person facing foreclosure would turn their Title over to Fannie Mae and in return, would be able to sign a one year lease to continue living there. There is the potential for month to month extensions after that time. This would prevent the lengthy and expensive procedure a lender goes through with pursuing a foreclosure. In addition, it will help to keep family and any tenants in their homes during this period.
Loan Modification is still the preferred option as it allows people to retain their ownership. This program is to help those who do not qualify for a loan modification but still want to remain living in their homes for a period of time. This will also have less of an impact on a borrower's credit report.
In order to qualify, a homeowner must be living in the home as their primary residence. They must also prove that they can pay the market rent which will be established by a local management company. These rents are based on the current market rates. In addition, any tenants already renting from the homeowner may be also offered a lease to remain living at the property. In the event that the house is sold, the lease or leases will be transferred to the new owner.
Freddie Mac has a similar program that was started in March. Their program requires that the foreclosure be completed first. After that happens, a month to month is offered.
Although these programs may not be suitable for everyone, it can be attractive to those who have children in school and do not want to uproot them in the middle of the year. Also, since rents have gone down just as home values have gone down, this can be more affordable for those who do not qualify for a loan modification.
This program is designed to help homeowners losing their homes during the transition. It is also a way for Fannie Mae to continue collecting money while keeping the number of foreclosures down as the real estate market is already saturated. It will prevent homes from being vandalized and will promote stability in the neighborhood. Anyone who is facing foreclosure should consider looking into the Deed for Lease program to see if they qualify.